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Johnson County

May 16, 2014

A day after the Fort Worth ISD sued Chesapeake Energy over its royalty payment practices, the Star-Telegram filed its own suit against the natural gas producer, alleging two Chesapeake units improperly deducted costs from royalties on one lease and has failed to pay royalties on another. The suit seeks between $200,000 and $1 million in damages. A number of royalty owners in the Barnett Shale, including the cities of Fort Worth and Arlington, and in other states have sued Oklahoma City-based Chesapeake over similar issues. In one of the largest such cases, the company last year paid $7.5 million to settle a class-action lawsuit in Pennsylvania alleging underpayments of royalties.

According to the Star-Telegram's suit, filed in state court in Fort Worth, the Star-Telegram signed two leases with Chesapeake, one in Tarrant County in 2007 and one in Johnson County in 2010. On the Tarrant County lease, the suit says Chesapeake "impermissibly deducted certain costs and expenses from the royalties due Star-Telegram. Further, it appears as though Chesapeake has failed to properly pay Star-Telegram on the full volumes of gas that are applicable to Star-Telegram's royalty share." In the Johnson County lease, the suit alleges Chesapeake began production from wells on a unit that includes the Star-Telegram's lease as early as March 2011, but the Star-Telegram has never received any royalties on it.

March 24, 2014

A Johnson County judge last week last month ordered a pipeline company to pay more than $1.6 million for a property easement that had previously been valued just under $80,000. The easement dated to 2007, and with back interest and expenses the jury's valuation came to $2.1 million.

According to court records, Peregrine Pipeline sought a 6,400-foot-long easement across a 99-acre parcel owned by Eagle Ford Land Partners L.P. for installation of a 16-inch natural gas pipeline. When the property owner and Peregrine could not agree on a value, Peregrine condemned the 20-foot-wide strip of land under eminent domain, and in October 2007 a special commissioners court set a value of $79,979 for the easement. That award included a permanent easement on the 20-foot easement, which altogether covered nearly 3 acres, and a temporary easement on a 55-foot-wide strip used only during construction.

But after a one-week trial in February, a Johnson County jury valued those two easements at $282,590. The six-person jury then found that the market value of the rest of the property was diminished by $1,350,410, for a total award of $1.633 million. With interest accruing at 5 percent annually, Judge Robert Dohoney issued his order on March 20 requiring Peregrine to pay a total of $2.1 million to Eagle Ford Land Partners.

According to a statement issued by Eagle Ford's attorney, Austin lawyer Luke Ellis, "this verdict sends a strong message that pipeline easements often cause significant damages to property beyond the easement area." Ellis said "many Texas landowners don’t realize that they have a constitutional right to seek just compensation for such damages." Peregrine plans to appeal, according to a statement from Ellis' firm.

February 22, 2013

Rigs working in the Barnett Shale kept falling this week, dropping by two to 27, the lowest in more than 10 years as producers continue to migrate toward fields that hold more profitable crude oil.Even Wise County, which has led the Barnett in drilling for several years since natural gas prices dropped sharply, tapered off, with seven active rigs compared to 11 a week ago, according to RigData. Montague County, which like Wise has areas rich in oil and natural gas liquids, had four rigs, as did Denton and Tarrant counties.

Nationally, the rig count slipped by one to 1,761, even though rigs seeking gas rose by seven to 428, said Baker Hughes Inc. of Houston. Rigs seeking oil were down eight to 1,329. Four were listed as miscellaneous. A year ago, Baker Hughes counted 1,981 working rigs.— Jim Fuquay

February 15, 2013

Rigs in the Barnett Shale took a big drop this week, falling by seven to 29, the lowest since at least January 2003, according to RigData. Nearly all the field’s active rigs are in areas holding crude oil or natural gas liquids. Wise County leads with 11, followed by Montague with four, and Denton and Johnson with three each.

Nationally there were 1,762 active rigs, up three, said Baker Hughes. Gas rigs declined by four to 421, and oil rigs rose seven to 1,337.

January 18, 2013

Wise County's 10 active rigs pushed the Barnett Shale rig count to 36, up three from a week ago, according to RigData. Well over half the North Texas field's rigs are in the wet and "oily" portion of the field's northwest reaches, including Wise, Montague with six and Jack with five. Palo Pinto County, which doesn't often enter the picture, had a new vertical well by G&F Oil Inc., which also has a rig in Jack County. Johnson County had three active rigs, up from the one or two the former hotspot has been running in the past year. Devon Energy as usual is the busiest operator, with nine rigs, followed by EOG Resources with four and EnerVest Operating with three each

Nationally, rigs actively looking for oil and natural gas was down a dozen to 1,749. Houston-based Baker Hughes said iFriday. There were 1,316 rigs were exploring for oil and 429 for gas. Four were listed as miscellaneous. A year ago there were 2,008 active U.S. rigs.

December 17, 2012

Air Liquide Industrial U.S. said Monday it has expanded its Cleburne air separation plant with a second "nitrogen liquefier" to meet demand from users including the oil and gas industry. Nitrogen is used in a number of energy applications, including drilling and completing of wells and maintenance of pipelines. Food and beverage companies as well as makers manufacturers also use nitrogen. Air Liquide said it expects to add 21 new permanent jobs over the next two years in Cleburne, expanding employment by about a third. Air Liquide, headquartered in France, opened the Cleburne facility in 1998 to produce oxygen, nitrogen and argon.

October 10, 2012

Halliburton says it has officially opened its Advanced Perforating Flow Lab in Alvarado, where it studies ways to blast holes in rock containing oil or natural gas. The company says the facility can simulate reservoir conditions with pressures as high as 50,000 pounds per square inch and temperatures as high as 400 degrees Fahrenheit. "We have the capability to reproduce the conditions we are going to find downhole, whether in deep water, unconventional resources or mature fields," said David Topping, vice president of Halliburton's wireline and perforating businesses. The lab is on the 800-acre campus of Halliburton's Jet Research Center, which it says it has operated for about 50 years.

July 24, 2012

Crestwood Midstream Partners says it agreed to buy gathering and processing assets in the liquids-rich southwestern area of the Barnett Shale from Devon Energy for $90 million. Houston-based Crestwood and Devon, the largest producer in the Barnett, inked a "20-year, fixed-fee gathering, processing and compression agreement under which Crestwood will gather and process Devon's natural gas production" from 20,500 acres that currently produce 95 million cubic feet a day. The deal should close in the third quarter.

Assets include a 74-mile low-pressure gathering system, a 100-million cubic-feet-a-day cryogenic processing facility and 23,100 horsepower of compression equipment in western Johnson County built since 2006. It's all adjacent to Crestwood's Cowtown gathering system purchased in 2010 from Quicksilver Resources, which includes two natural gas processing plants totaling 325 million cubic feet a day of capacity. "Upon closing, Crestwood is expected to consolidate the systems by increasing the system interconnect capacity with the ultimate goal to process all of Devon's West Johnson County natural gas production in Crestwood's Cowtown and Corvette processing plants," Crestwood said.

July 02, 2010

We had a story in today's paper on two Texas natural gas pipelines that exploded last month, killing three people all together. In both cases, state and federal officials have confirmed that the pipelines were not properly marked.

The reasons that happened in each incident are different. In one case, there's significant disagreement on the facts leading up to the explosion.

In the first incident on June 7, one worker was killed and seven others were injured when a crew hit a 36-inch pipe while digging a hole for a power pole in rural Johnson County. The massive fireball that burned for an extended period made national news.

Incident reports filed with the Texas Railroad Commission show that pipeline operator Enterprise Products Partners and excavator C&H Power Line are blaming each other.

The commission has confirmed that C&H called ahead to learn the location of pipelines before digging. The company argues that it was never told that a gas pipeline was in its way.

Enterprise says in its incident report that the company tried to follow up on C&H's call. At first, the company says, it couldn't find where C&H was planning to dig. An Enterprise official then contacted the excavator and was given the impression that C&H had already finished digging, according to the report.

A day after the Johnson County incident, two people died and others were injured when a dirt-contracting company hit a 14-inch pipeline with a bulldozer in Darrouzett.

In its incident report, dirt contractor Nick Thomas Inc. acknowledged to the commission that the company did not call in advance of digging.

Pipeline operator DCP Midstream noted in its report, "This excavator has a history of not making notifications."

State law requires that companies wanting to excavate call a national 811 number to state where they plan to dig and request information about pipelines and anything else underground that might be struck.

September 15, 2009

Chesapeake Energy, which is fighting a lawsuit filed by Burleson property owners who claim the company illegally reneged on a lease agreement that would have benefited 408 households, wants to have the case heard in a Dallas federal court. But the property owners filed the lawsuit July 20 in the 18th State District Court in Cleburne and want venue to be there. Burleson is in far northern Johnson County.

Chesapeake contends the proposed class action lawsuit should be in federal court in part because the Class Action Fairness Act authorizes such jurisdiction for class actions with more than $5 million at stake. Chesapeake, represented by the prominent Fort Worth law firm of Kelly, Hart & Hallman, notes that the lawsuit seeks nearly nearly $6.7 million just for lease bonuses.

Another well-known Fort Worth law firm, Whitaker, Chalk, Swindle & Sawyer, represents two named plaintiffs, Leslee Dawn Ahrend and Buster Ray Williams, and wants the lawsuit to be declared a class action that would include the hundreds of Burleson properties that would have benefited from a lease agreement reached in 2008 between representatives of Chesapeake and an alliance of homeowners .

Under the agreement, property owners would have received a lucrative lease bonus of $27,200 per acre and a 25.25 percent royalty, the lawsuit states. It contends that Chesapeake was guilty of breach of contract in aborting the agreement by refusing to sign lease agreements with individual property owners based on the terms of the agreement. The plaintiffs cite a letter, dated Oct. 16, 2008, that a senior landman representing Chesapeake sent to representatives of Burleson homeowners. The landman said that, as a result of the deep economic recession and plunging natural gas prices, Chesapeake was "withdrawing previous offers to lease your minerals." The ,lawsuit contends that Chesapeake this year has offered a lease bonus of only $1,000 an acre and a 25 percent royalty.